Wells Fargo & Co. Chairman Stephen Sanger will likely step down before the company’s next shareholder meeting early next year as part of a shake-up of the board of directors, the Wall Street Journal reported, citing people familiar with the matter.
Vice Chairman Elizabeth Duke will probably replace Sanger atop the San Francisco-based company’s board, according to the newspaper. Wells Fargo said last week that the board is reviewing its own “structure, composition and practices,” which will lead to actions to be announced later in the third quarter.
Calls for changes on the board intensified last month after the bank said 500,000 clients might have unwittingly paid for protection against vehicle loss or damage while making monthly loan payments, even though many drivers already had their own insurance policies.
The disclosure follows a scandal last year in which the company acknowledged that it may have opened millions of unauthorized deposit and credit-card accounts.
New York City Comptroller Scott Stringer, whose office oversees investments in city pension plans, last month called the new revelations about auto insurance a “full-blown scandal."
He said the company should replace Sanger with a new independent chairman, and Wells Fargo’s directors should disclose “what the board knew and when it knew it, and how executives are being held accountable.”
Oscar Suris, a Wells Fargo spokesman, declined to comment about board member changes.
The bank said last week that the board’s review was in response to “feedback received at our annual stockholders’ meeting in April.”
Sanger, 71, joined the bank’s board in 2003 while chairman of General Mills Inc. and became Wells Fargo’s lead director in 2012. Only three of the lender’s board members have served longer. He’ll turn 72 before the next annual meeting and the bank requires directors to retire by that age.
Four Wells Fargo board members, including Sanger, received less than 60 percent of investors’ votes for re-election at the firm’s April shareholders’ meeting. Sanger got 56 percent, while Enrique Hernandez Jr. and Federico Pena both received less. Cynthia Milligan received 57 percent.
Four other members got less than 70 percent of votes: John Baker II, Lloyd Dean, James Quigley and Susan Swenson.